Private market investment management firm Hamilton Lane, which launched an office in Shanghai in February last year, is planning to raise its first RMB-denominated secondaries fund, according to a report by Secondaries Investor on Thursday.

The fundraising process will start this year while the target fund size is not yet final, the portal reported citing sources. The vehicle will start deploying capital after the first close, which is expected by the end of the year. 

The RMB fund will target Chinese LPs, including banks, insurance companies, family offices and other financial institutions, the report added.

The Shanghai office—Hamilton Lane’s sixth in the APAC market in addition to Hong Kong, Seoul, Singapore, Sydney, and Tokyo—was led by Mingchen Xia, the US firm’s Managing Director and co-head of Asia investments.

Hamilton Lane also has offices across North America, Europe, Asia-Pacific, and the Middle East. The opening of the Shanghai office was aimed at expanding into China’s domestic secondaries market.

Hamilton Lane has already been investing in RMB secondaries via the Qualified Foreign Limited Partnership programme (QFLP).

It obtained a Shanghai QFLP pilot status in May 2022, which allows foreign investors to convert USD to RMB and make investments in RMB private markets. Hamilton Lane was the first institution in Shanghai to establish a secondary fund through the QFLP structure to source deals in the RMB market.

Besides Hamilton Lane, London-based Coller Capital also has an RMB secondaries fund in China. The Coller Capital Secondaries RMB I Fund had a target size of 1.5 billion yuan ($218 million) and secured its first close in April last year.

The secondaries market in Asia is increasingly gaining steam as both general partners (GPs) and limited partners (LPs) in the region are clocking deals in this segment with valuations becoming more attractive amidst macroeconomic headwinds.